Private mortgage insurance was used on approximately 4% fewer loans in 2017 when compared with 2016, according to the U.S. Mortgage Insurers.
There were nearly 1.01 million mortgages originated last year, both purchase and refinance, where the borrower obtained a private mortgage insurance policy, a study from the trade group said. In 2016, 1.05 million mortgages needed PMI, according to a 2017 Urban Institute report previously cited by the USMI.
Only 53% of loans with PMI originated last year were made to a first-time homebuyer. The average credit score was 743 and the average loan amount was $235,661.
The District of Columbia had the largest percentage of loans with PMI made to first-time buyers, at 75% of 2,273. Next was Massachusetts, with 68% of the 19,375 mortgages originated last year with PMI, followed by California at 66% of 72,938 loans, New York at 66% of 25,470 loans and New Jersey at 66% of 22,618 loans.
At the other end of the spectrum, three states had only 40% of the loans originated using PMI that went to first-time buyers: Alaska (1,780 loans to all borrowers that had PMI), Wyoming (1,853 loans) and Arkansas (7,585 loans).
The state with the most loans originated in 2017 that needed PMI was Texas with 79,030, followed by California, Florida (69,827), Illinois (47,866) and Michigan (41,810).
“Coming out of the financial crisis, the MI industry is even stronger with more robust underwriting standards, stronger capital positions and improved risk management,” said USMI President Lindsey Johnson in a press release. “MI has played a critical role in protecting taxpayers and the federal government from undue mortgage credit risk for six decades, and will continue to provide this important function in the housing finance system moving forward.”